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tv   [untitled]    September 16, 2011 9:30am-10:00am EDT

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only witnessing the sewage infrastructure construction the small region special economic zone promises exceptional of the treaties for debility fuel business in russia will come to the small region for more information loved ones of the book invest in some more of the all you. stories on our t.v. you want seems powerless to prevent having violence in service border with breakaway costs of zero some security council members refused to support russia's call for talks kosovo appears determined to seize two checkpoints with local serbs to stop them by blocking roads leading to the border first. fierce fighting is underway in libya where former rebels claim they're advancing on two of the few remaining gadhafi strongholds in certain body will leave her back quite tired said heavy water it's as well as as well as a nato airfield. and. also the much anticipated south stream gas pipeline moves a step closer to reality as russia signs
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a landmark agreements with top european energy giant with a project a state of the liberated russian gas and directly to european consumers bypassing other transit countries well up next our special report on the white collar criminals who push the world into economic turmoil that's up next an artsy. thank you i'm going to leave the i will. go round his house ok. thank you very much that's a relative. to the few smart. you want to make their job right but whatever.
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we say we live in a capitalist pig society put the bad mood. capitalism is our way of
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life the market system its highest expression our media hypes it in quasi religious terms even if its impact is sometimes quite negative and even debated in classrooms kept we agree that capitalism is an economic system a system of production and distribution of things we need one i want to bring that to you but i'm about to share how to be a make up bank for a moment to operate. most of us recognize we live in an inherently volatile system problem free but some of the conventional wisdom goes better than any alternative when you still believe the free market is our salvation even as our economy has crashed brought down and not just by greed but calculated scams and schemes that's not of the intent of the laws in reach the few and devastated the economy leading to
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a massive loss of jobs homes and personal wealth. freed from. can do things and six my film in debt we trust to warn of a coming economic collapse. the stock pick the next great economic crisis in the station a report of out of debt which it will create an economic crisis so deep that it threatens us i was called a dinner in the marines and a long list of elevation. on the stick was just really look. i followed up with a book that came out before lehman brothers went bankrupt speaking on wall street i called for a jail out not a bail out i used to think of wall street as a financial center i now think of it as a crime see. nomi prins was a managing all. bear stearns and goldman sachs this is the most expensive take
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out the biggest crime. in world history we're talking about a quote we can't even quantify you're talking double digit trillions of dollars into this film will explore this scale of monies missing written off last ripped off and these various scams and in the case of the bailout funds unaccounted for. or even caught or editor of vanity fair we have some the best when he wrote it can fairly be said that the chain of catastrophic debts made over the past decade by a few hundred bankers may will turn out to be the greatest nonviolent crime against humanity in history they brought the world's economy to its knees last tens of millions of people their jobs and homes and trash the return and plans of the generation and they could drive an estimated two hundred million people worldwide
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into dire poverty in other words and never before have so few done so much to so many and when experts estimate the total money last may reach a hundred ninety six point seven trillion dollars and that could be low like millions of americans i was thousands of dollars in retirement funds and i haven't had as bad as the many it's not just about them it's about me too i have a stake in it and like millions of angry about the way our economy with a wrecked. to cope with our investigation we spoke with convicted white collar criminal sam and talk the right color coming up as well because for it you subpoena documents we destroy documents you subpoena witnesses we walk so here you are at a disadvantage because it's the right color for in effect we are economic predators . to the investigative reporter on the business the wall street steals far more
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than the mafia says gary weiss a wall street. takes a loss much larger sums of money to involve the mafia stales the regulatory system is such that he can get away with the lack of media scrutiny in the absence of regulation who might spring illusion that markets and real estate could only go up created the casino mentality and environment for successful fraudsters and write code criminals your honor for many years up until my address on december eleventh two thousand and eight i operated a ponzi scheme i knew what i was doing was wrong and the criminal. white collar crime on wall street has been under-reported except for a very few high profile cases as when hundreds of reporters staked out a new york courthouse for
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a poor gurney made off said mission of guilt and his ponzi scheme and their millions and millions of dollars they owe it all to go to the source of data for many of them right oblique angry you know ira worth one point three million of my other money it's was about one point eight million people and it's gone on that how do you think you get away with this for so long what's now a person who's run a stamp for so many years without that effect that was one of the things i thought of i have been scaled up i can successfully run a scam for that long. was not alone regulators are now investigating scores of similar crimes i see there is a ponzi ammonium under way there's four levels of every white collar crime is the got it gives the orders the people the what is the people that knew what was going on but didn't participate and the people that should have known what was going on like boards of directors or what it is but that across as a plate so what they try to do is they try to. get to the culpability of the guy at
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the top by working from the bottom the crown that you have in the body weight of cases they cut the power first and he's protecting the other three layers underneath the wall street a lot early extraction turns to be very borderline illegal because the people it's ratting tend to be the one setting up the legal framework route economics is not limited not only only calls it in our new book but the reason why the line between what is clear and what is now criminals disappear is because a did it will exist but when you remove all that is fiction when you remove all the controls then of course what is legal and want is illegal so you're creating a crime scene and you're creating a crime and you're. prophetically by the police officers all at the same time only in the form of a regulatory body or. for the law as it were for wall street in june two thousand
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and nine the f.b.i. said it was investigating thirteen hundred securities fraud cases including many ponzi schemes as well as more than five hundred eighty corporate fraud cases and most of these cases got little attention but the media loves arch criminals like financier bernard madoff is a complicated white collar crimes of which the government does not have the resources to throw really prosecute and the white collar criminals know it so they set it up not as a single transaction that's a crime but a series of transaction. what's that all put together that makes it a crime to do that you have to go beyond the prosecution of one wrongdoer and look at the way wall street itself became a ponzi scheme you have to examine a pattern a system of criminality which brought the investment and real estate worlds together in a monkey trillion dollar scamp. to simplify there were three interconnected rings
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in this circus and evolving the biggest firms in the industry it started in the real estate business where our desire for homes the american dream was turned into a scheme first predatory subprime lending over years got people into mortgages they couldn't afford and that the lenders knew they couldn't sustain it was enabled by artificially low interest rates with financing provided by draw five of the top banks in the country the second component of the crime involves what happened next when the biggest banks and investment houses on wall street bought and then securitized loans as structured financial products these mortgage bundles would be sold worldwide without full disclosure of their lack of underlying assets or the risks the banks that bought these derivative products failed to do due diligence relying on rating agencies that overvalued their worth and accounting firms that
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did not do their job the whole process was corrupt to the core. finally the third level of this interconnected but they centralize criminal enterprise involved ensuring these often fraudulent practices in some cases betting against them by the very people who sold them to guarantee that they would be protected when borrowers who couldn't afford loans to faulted they used insurance companies like a i.g. . put these three criminal components together and a pattern emerges a pattern of financial crime. the financial crisis started because people could no longer afford to make payments on their sub prime mortgage alone is a good idea a good street all of this from five days of being foreclosed all of that if this is
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anyone under strict nobody moves in nobody wants the rents in the housing crisis hit america like a tsunami destroying neighborhoods and costing millions of families their homes etc but. sunk ok. but no threat to us. how did it happen why did so many top banks lend to some of the poorest members of society in a practice known as sub prime lending featuring loans like the one called a new job no income no jobs no assets apparently no problem the reason higher fees up front and billions more when mortgages were turned into securities resold by wall street. at sixty percent of the subprime
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borrowers could have qualified the less costly prime rates but most were told their homes would go up in value many accepted onerous terms to give their families a piece of the american dream. and then even load into believing they could afford houses with no money down and loading for the creek and frustrates watch the cost of adjustable rate mortgages or alarms shoot up when i first got it i got a one percent introduction in law and my mortgage came down the second month and went up to seven point nine zero and now it's up to nine point nine and it just keeps on going up if i'm paid twenty eight hundred dollars a month for my home and one in there. that's the j. lo and marc anthony. now where i. was in and have to leave our homes our dream i mean even ourselves because you know the rates are going up so high and we don't even understand why it's going to it's
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going in somebody's pocket but not out of it should have been no surprise to anyone fraudulent lending practices resulted in a steep rise in foreclosures beginning in late two thousand and six some of the biggest subprime lenders themselves later declared bankruptcy and the news media homeowners took most of the blame it was said they had exercised a failure of personal responsibility the responsible borrowing was stigmatized and irresponsible lending was not. into the fifty first occasion the bee i described its responsibility for investigating financial fraud on its website it is called mortgage fraud and demick they're calling it operation bullish a mortgage the f.b.i. failed the result of a three and a half hot probe it's in mortgage related fraud f.b.i.
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director robert muller for this operation more than four hundred defendants have been charged and we have a keda hundred seventy three convictions in crimes said accounted for more than one billion dollars in estimated losses the f.b.i. first warned of this fraud epidemic in two thousand and four reporting also though that their corporate crime unit said been downsized to join the fight against terrorism some criminal cases are reported in the press but not all are prosecuted with companies often paying fines rather than facing a judge or a jury goldman sachs paid sixteen million dollars to settle this so brian complain the massachusetts authorities said they had this zine mortgages to fail and they paid sixty billion dollars but they did not get made any deal that standard standard when wall street firms to go she ate. what are in effect plea bargains
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with regulators for them not. according to an investigation by the center for public integrity twenty five of the sleaziest subprime lenders were backed by the biggest banks in the united states citi group wells fargo j.p. morgan chase and bank of america together the financial times reported they originated one hundred billion dollars in some prime mortgages two thousand and five and two thousand and seven almost three quarters of the total. what i did of the work i didn't feel i first got involved in but lately maybe i was a loner regenerator. and during that time what i had seen was nothing short of amazing in terms it was very predatory techniques that were being used the salesman ship that was being used in the gimmicks of the loans and how it was structured it
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really disturbed me catchall to this and how they can get away with that is people here full disclosure depending on the lending institution you went to in other words a bank a broker or when the institution or three different or three have different sets of regulations that govern them and so full disclosure it wasn't necessarily important to the load itself just get them to sign on the dotted line if they were happy with the numbers you have a little. how many of us smoke but our time with them say basically what we do is in someone's house or issues and several other issues but what i want to do is show the signature of edna. but with finding out is eighty percent of the people going to know that while ations of. this is the signature on her. basically which is right here. and then have this signature here which is your actual signature which shows a completely different signature it doesn't take to me an expert to figure out that
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there is something terribly wrong here someone gets to set aside a loan docs and they're usually probably two to three inches thick and there might be fifteen or twenty really pertinent disclosures that force you to worry about ok and they're very good there and i don't know what they're signing usually they'll send out a notary to sign the loan with them and then sign and the notary usually has no clue of what is in that moment and it's all part of the scheme we like to call it and then we go here we start looking it's white out and then we have a consultant. we see a consultant fee on a mortgage that should set off red flags that there's not really any consultants on a mortgage or sale it should have been one fee to rise mortgage this mark murphy is apparently someone we need to investigate and find out exactly who he is why he got seven hundred dollars for this long these people basically project we took this woman's home that she's been living in for over fifteen years and thinking that it's hers where it was actually never was her since one thousand nine re the fraud
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and deception that was built into these transactions was a necessary part of the transaction in order to get the profits. wall street doesn't do mortgage lending what wall street did was package sell repackage and resell mortgages making what was a small housing bubble a gigantic housing bubble and making what became an american financial problem very much a global financial problem. we'll come to wall street today how common is max wolfe who works in the financial industry is our tour guide you're looking at people who've gone through ten unthinkable low probability events in a four month period when every time you think you can catch a breather there's another leg down atmospheres on trading floors and in a lot of these firms are few aerial friends are gone bonuses are gone futures are on shore. it's been very difficult to. treat people who wanted to get into
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a conversation i mean the regular exams i would apply by december for ten years ok and i want to with a regular sort of a city call when i got offices it was going to be around you know there was yes you see where all the guys are supposed to be watching you know what's going on and i mean when i was a bank several years ago you know we had surprises in the way through not just you know but we we got homes around nobody got friends around this i just wonder if you think the average person in america really crafts that can see it across the room i hope they do and i think it's an excellent busted my personal guess is no my personal guess is they'd be much more angry and much more interested if they understood how much is on at play here. the destruction there's a relative lack a straight paid her just read jill's all the money has been made at this point all the takeout happened a couple years ago now you just sort of looking at. a very profitable time which
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will be followed by another very profitable time because the same people will still be involved in such in the same types of things just biggest crime in all of this is the thing that's the least able to be understood and examined by the f.b.i. by the department just by anyone in washington he was pretty tiny lowest layer of the crisis that started with some prime defaulting at the homeowner borrower love all that money wasn't made there the money was made because several layers up the pyramid wall street investment firms and commercial bank investment groups just cited to repackage those mortgages create layers of them and they then resold to investors here's what happens there are three defaults on mortgages. the bank holds. sells goes at ten cents on the dollar to
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a second back that frank puts together with three other defaults and three other defaults makes a second package and sells to a third bank the third bank sells six of these things for countries and dangles them and sells them to some investor no idea what he has. they are really against those layers which is the real crime they would take a little piece of a layer of a security i don't need which somewhere there was a bunch of home buyers and they would take it and they would borrow three times the amount of money that it represents a five big investment banks dominated wall street it is really who took the subprime loans purchased from banks package them as bundled investments to be sold worldwide there were reports that there was what was called sanction from wall street other words wall street investment houses as they began to make billions on these securitized loans and c.d.o. xin derivatives were pressuring the mortgage people of the local level to give us
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more give us more people say well the reason why wall street was putting the pressure of the sucking sound that you referred to are on the lower the originators because the profits that they were generated with this whole concept first opened up and people realized the money that was to be made on the back end trading the paper they were essentially creating liquid cash from nothing but talking to myself as fourteen trillion dollars worth of assets back with sub prime and other types of mortgages and c.e.o.'s created between two thousand and three and two thousand and seven fourteen trillion were created on that. investment houses had funds and private equity funds could leverage thirty forty times banks could leverage fifteen to twenty times on average they could only leverage their team time sponsor insecurity more than a value of the whole country of the whole gross domestic product if you were not rich in this. very conservative estimate assume that the leverage for the fourteen
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trillion dollars worth of that studios was ten times which to me is a conservative estimate that's one hundred forty trillion dollars worth nothing. if you lose a fortune trillion. hundred forty minus the fourteen trillion doesn't exist you have nothing you have no clutter left to pay to the people you borrow money from it all falls down the practice. nor so. clearly can't afford to target these people in order to give them mortgages and then to take his mortgages to sell it back to the balance in order to create mortgage backed security is it criminal practice for sure and i think the bank does their. civil and considerably in some cases criminal but that's life build your rises when they sell their portfolio of mortgages to investors. who are mortgages
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and there were very injured victims at that chain. distribution chain because i can direct school boards around the country that have lost. farms and lost their pension funds. in the past. right. now i have. hope that. i could make such a. life gets. better. and i would even say that this is racketeering because it took place between. real estate agencies and. to get a lot of people a lot of money but when these homeowners the record numbers. came in.
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the economy. the looming. is this the physicists. it's tsi to. see. him in. coming. down to the official to the cation kyon a film called touch from the point you can see all she. says.

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